Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Forward-looking statements

This Quarterly Report on Form 10-Q, including this Management’s Discussion and Analysis of Financial Condition and Results of Operations, contains statements that are forward-looking statements within the meaning of the federal securities laws and as such are intended to be covered by the safe harbor for "forward-looking statements" provided by the Private Securities Litigation Reform Act of 1995. These forward-looking statements could include, among other things, statements about our balance sheet and liquidity, our expenses, revenues, billings and collections, patient census, the impact of the cybersecurity incident experienced by the Company in 2025 (cyber incident), the impact of the One Big Beautiful Bill Act (OBBBA) and federal government policy changes or shutdowns on our business, including with respect to federal funding and reimbursement rates of Medicare, Medicare Advantage (MA), Medicaid and other government programs, availability or cost of supplies, including without limitation the impact of evolving trade policies and tariffs and any reduction in clinical and other supplies due to any disruptions experienced by third party vendors, including with respect to our ability to provide home dialysis services, treatment volumes, mix expectation, such as the percentage or number of patients under commercial insurance, including potential impacts to such mix as a result of U.S. administration policies, current macroeconomic, marketplace and labor market conditions, and overall impact on our patients and teammates, as well as other statements regarding our future operations, financial condition and prospects, capital allocation plans, expenses, cost saving initiatives, other strategic initiatives, use of contract labor, government and commercial payment rates, expectations related to value-based care (VBC), integrated kidney care (IKC), MA plan enrollment and our international operations, expectations regarding increased competition and marketplace changes, including those related to new or potential entrants in the dialysis and pre-dialysis marketplace and the potential impact of innovative technologies, drugs, or other treatments on the dialysis industry, and expectations regarding our share repurchase program. All statements in this report, other than statements of historical fact, are forward-looking statements. Without limiting the foregoing, statements including the words "expect," "intend," "will," "could," "plan," "anticipate," "believe" and similar expressions are intended to identify forward-looking statements. These forward-looking statements are based on DaVita's current expectations and are based solely on information available as of the date of this report. DaVita undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of changed circumstances, new information, future events or otherwise, except as may be required by law. Actual future events and results could differ materially from any forward-looking statements due to numerous factors that involve substantial known and unknown risks and uncertainties. These risks and uncertainties include, among other things:

*•*external conditions, including those related to general economic, political and global health conditions, including without limitation, the impact of global events and political or governmental volatility, including in the Middle East; the impact of the domestic political environment and related developments on the current healthcare marketplace, our patients and on our business; the impact of infectious diseases or other adverse conditions on our financial condition, the chronic kidney disease population and our patient population; supply chain challenges and disruptions, including without limitation with respect to certain key services, critical clinical supplies and equipment we obtain from third parties, and including any impacts on our supply chain and cost of supplies as a result of global events, natural disasters or evolving trade policies, including tariffs; the impact on our patients and industry of continued increased competition from dialysis providers and others, including new or potential entrants in the dialysis and pre-dialysis marketplace; the impact of new or innovative technologies, drugs, or other treatments, including our ability to successfully implement new technologies, treatments or therapies in our business such as those related to middle molecule toxin clearance; elevated teammate turnover or labor costs; and our ability to respond to challenging U.S. and global economic and marketplace conditions, including, among other things, our ability to successfully identify cost saving opportunities;

•the concentration of profits generated by higher-paying commercial payor plans for which there is continued downward pressure on average realized payment rates; our ability to negotiate and maintain contracts with these payors on competitive terms or at all; a reduction in the number or percentage of our patients under commercial plans, including, without limitation, as a result of healthcare, immigration or other policies implemented by the U.S. administration, continuing legislative efforts to restrict or prohibit the use and/or availability of charitable premium assistance, or as a result of payors implementing restrictive plan designs or resulting from negotiations with large commercial payors that we have in the past, and currently are, conducting on a concurrent basis;

*•*risks arising from laws, regulations or requirements applicable to us or changes thereto, including, without limitation, OBBBA and those related to trade policy, healthcare, privacy, antitrust matters, and acquisition, merger, joint venture or similar transactions and/or labor matters, and potential impacts of changes in interpretation or enforcement thereof or related litigation impacting, among other things, coverage or reimbursement rates for our services or the number of patients enrolled in or that select higher-paying commercial plans, and the risk that we make incorrect assumptions about how our patients will respond to any such developments;

*•*our ability to successfully implement our strategies with respect to IKC and VBC initiatives that may be impacted by, among other things, changes to the Comprehensive Kidney Care Contracting model and home based dialysis in the desired time frame and in a complex, dynamic and highly regulated environment;

•a reduction in government payment rates under the Medicare End Stage Renal Disease program, state Medicaid or other government-based programs and the impact of the MA benchmark structure and adjustment methodologies;

*•*our reliance on significant suppliers, service providers and other third party vendors to provide key support to our business operations and enable our provision of services to patients, including, among others, suppliers of certain pharmaceuticals, administrative or other services or critical clinical products; and risks resulting from a closure, reduction or other disruption in the services or products provided to us by such suppliers, service providers and third party vendors;

*•*our ability to successfully maintain, operate or upgrade our information systems or those of third-party service providers upon which we rely and our ability to successfully adopt or adapt to new technologies, treatments or therapies, including technologies that utilize artificial intelligence;

*•*legal and compliance risks, such as compliance with complex, and at times, evolving government regulations and requirements, and with additional laws that may apply to our operations as we expand geographically or enter into new lines of business;

*•*noncompliance by us or our business associates with any privacy or security laws or any security breach by us or a third party, such as the cyber incident, including, among other things, any such non-compliance or breach involving the misappropriation, loss or other unauthorized use or disclosure of confidential information;

*•*our ability to attract, retain and motivate teammates, including key leadership personnel, our ability to manage potential disruptions to our business and operations, including potential work stoppages, and our ability to manage operating cost increases or productivity decreases that may be related to political unrest, legislative or other changes, union organizing activities, or volatility and uncertainty in the current challenging and highly competitive labor market that has experienced an ongoing nationwide shortage of skilled clinical personnel, among other things;

*•*changes in practice patterns, pricing, or reimbursement and payment policies or processes related to pharmaceuticals, medical equipment or supplies, including with respect to oral phosphate binders, among other things;

*•*our ability to develop and maintain relationships with physicians and hospitals, changing affiliation models for physicians, and the emergence of new models of care or other initiatives that, among other things, may erode our patient base and impact reimbursement rates;

*•*our ability to complete and successfully integrate and operate acquisitions, mergers, dispositions, joint ventures or other strategic transactions on terms favorable to us or at all; and our ability to continue to successfully expand our operations and services in markets outside the United States, or to businesses or products outside of dialysis services;

*•*the variability of our cash flows, including, without limitation, any extended billing or collections cycles that may be due to, among other things, defects or operational issues in our billing systems such as those experienced during the cyber incident, or defects or operational issues in the billing systems or services of third parties on which we rely; the risk that we may not be able to generate or access sufficient cash in the future to service our indebtedness or to fund our other liquidity needs;

*•*the effects on us or others of natural or other disasters, public health crises or severe adverse weather events such as hurricanes, earthquakes, fires or flooding;

*•*factors that may impact our ability to repurchase stock under our share repurchase program and the timing of any such stock repurchases, as well as any use by us of a considerable amount of available funds to repurchase stock;

*•*our goals and disclosures related to sustainability matters, including, among other things, evolving regulatory requirements affecting environmental, social and governance standards, measurements and reporting requirements; and

*•*the other risk factors, trends and uncertainties set forth in our Annual Report on Form 10-K for the year ended December 31, 2025 (2025 10-K), and the risks and uncertainties discussed in any subsequent reports that we file or furnish with the Securities and Exchange Commission (SEC) from time to time.

The following should be read in conjunction with our condensed consolidated financial statements.

Company Overview

Our principal business is to provide dialysis and related lab services to patients in the United States, which we refer to as our U.S. dialysis business. We also operate our U.S. integrated kidney care (IKC) business, our U.S. other ancillary services, and our international operations, which we collectively refer to as our ancillary services, as well as our corporate administrative support functions. Our U.S. dialysis business is a leading provider of kidney dialysis services in the U.S. for patients suffering from chronic kidney failure, also known as end stage renal disease (ESRD) or end stage kidney disease (ESKD).

We assess our revenue and operating performance for our U.S. dialysis business based upon several principal metrics including, among others, treatment volume, revenue per treatment and patient care costs. Each of these metrics may be impacted by a number of factors that change from period to period and over time. For example, treatment volumes may be impacted by, among other things, mortality levels, missed treatment rates and admission rates. Revenue per treatment may be impacted by, among other things, rate changes, mix of patients with commercial plans and government programs as primary payor, timing of collections and seasonal factors such as patients meeting health plan co-insurance and deductibles. Patient care costs may be impacted by, among other things, labor market conditions and cost trends in pharmaceuticals and other medical supplies. We have set forth a discussion of such factors below, and we believe that information related to changes in these metrics from period to period allows investors to assess the performance of the business.

General Economic, Political and Global Health Conditions

We continue to be impacted by external conditions, including, but not limited to, those related to general economic, political and global health conditions and changing population or demographic trends. These conditions can impact our business in a variety of ways, including, among other things, by affecting our patient census, treatment volumes, revenues, results of operations and operating and other costs. Certain of these impacts could be further intensified by global events such as the ongoing conflicts in the Middle East and Ukraine that have continued to drive sociopolitical, geopolitical and economic uncertainty; severe weather events and other natural disasters; the impact of healthcare, immigration, trade and other policies implemented by the U.S. administration; and the impact of federal government shutdowns. These conditions are generally outside of our control, cannot reasonably be predicted and are interrelated or have interdependent complex consequences. As a result, the ultimate impact of these conditions on our business over time will depend on a myriad of future developments and is highly uncertain and difficult to predict. For additional discussion of general economic, marketplace and global health conditions that could impact our business, see Part I Item 1. "Business" and Part I Item 1A. "Risk Factors" in our 2025 10-K.

In the first quarter of 2026, treatment per day volumes were flat compared to the fourth quarter of 2025. Total treatment volumes in the first quarter were ahead of expectations due to, among other things, better than expected patient census that was primarily driven by lower than expected mortality and higher patient transfers partially offset by lower than expected new admissions. Mortality levels over time may be influenced by a number of factors, among other things, the impact of infectious diseases on our patient population and the availability and use of vaccines, treatments and therapies. Changes in these mortality rates, particularly in the ESKD and CKD populations, may in turn impact admission rates, treatment volumes, future revenues and non-acquired growth, among other things, and the magnitude of these cumulative impacts could have a material adverse impact on our results of operations, financial condition and cash flows. For additional detail on these risks, see the discussion in Part I Item 1A. "Risk Factors" of our 2025 10-K.

Global economic conditions and political and regulatory developments, including, among other things, ongoing inflationary pressures and U.S. administration policies have increased, and may continue to increase, our expenses. For example, staffing and labor costs have increased during the year, due to, among other factors, the continuation of inflationary conditions. While the cumulative impact of any increased staffing, labor, and supply costs and other expenses could be material, we have seen lower than expected labor-related costs due to, among other things, productivity improvements and we expect these efficiencies to continue throughout the year. Our industry has also experienced increased union organizing activities. For example, union petitions have been filed at a number of our clinics in California. While we have won some elections, we are in different stages of the voting process and have been subject to legal challenges. For additional details on the risks related to rising labor costs and union organizing activities, see the discussion in Part I Item 1A. "Risk Factors" of our 2025 10-K under the headings, "Our business is labor intensive..." and "Global health conditions, changing population or demographic trends, severe weather events or natural disasters and general economic and political conditions..."

We believe that the aforementioned developments and general economic, political and global health conditions will continue to impact the Company in the future. Their ultimate impact depends on future developments that are highly uncertain and difficult to predict.

Financial Results

The discussion below includes analysis of our financial condition and results of operations for the three months ended March 31, 2026 compared to the three months ended December 31, 2025, and the year-to-date periods for the three months ended March 31, 2026 compared to the three months ended March 31, 2025.

Consolidated results of operations

The following tables summarize our revenues, operating income (loss) and adjusted operating income (loss) by line of business. See the discussion of our results for each line of business following the tables. When multiple drivers are identified in the following discussion of results, they are listed in order of magnitude:

			Three months ended												Q1 2026 vs. Q4 2025
			March 31, 2026						December 31, 2025						Amount						Percent
			(dollars in millions)
Revenues:
U.S. dialysis			$	2,942					$	3,076					$	(134)					(4.4)		%
Other — Ancillary services			498						567						(69)						(12.2)		%
Elimination of intersegment revenues			(24)						(23)						(1)						(4.3)		%
Total consolidated revenues			$	3,416					$	3,620					$	(204)					(5.6)		%
Operating income (loss):
U.S. dialysis			$	506					$	556					$	(50)					(9.0)		%
Other — Ancillary services			6						37						(31)						(83.8)		%
Corporate administrative support			(30)						(32)						2						6.3		%
Operating income			$	482					$	561					$	(79)					(14.1)		%
Adjusted operating income (loss)(1):
U.S. dialysis			$	506					$	556					$	(50)					(9.0)		%
Other — Ancillary services			6						62						(56)						(90.3)		%
Corporate administrative support			(30)						(32)						2						6.3		%
Adjusted operating income			$	482					$	586					$	(104)					(17.7)		%

Certain columns, rows or percentages may not sum due to the presentation of rounded numbers.

(1)For a reconciliation of adjusted operating income (loss) by reportable segment, see the "Reconciliations of Non-GAAP measures" section below.

			Three months ended												YTD Q1 2026 vs. YTD Q1 2025
			March 31, 2026						March 31, 2025						Amount						Percent
			(dollars in millions)
Revenues:
U.S. dialysis			$	2,942					$	2,823					$	119					4.2		%
Other — Ancillary services			498						415						83						20.0		%
Elimination of intersegment revenues			(24)						(14)						(10)						(71.4)		%
Total consolidated revenues			$	3,416					$	3,224					$	192					6.0		%
Operating income (loss):
U.S. dialysis			$	506					$	476					$	30					6.3		%
Other — Ancillary services			6						(3)						9						300.0		%
Corporate administrative support			(30)						(34)						4						11.8		%
Operating income			$	482					$	439					$	43					9.8		%

Certain columns, rows or percentages may not sum due to the presentation of rounded numbers.

U.S. dialysis results of operations

Treatment volume:

			Three months ended												Q1 2026 vs. Q4 2025
			March 31, 2026						December 31, 2025						Amount						Percent
Dialysis treatments			7,029,525						7,264,520						(234,995)						(3.2)		%
Average treatments per day			91,650						91,608						42						—		%
Treatment days			76.7						79.3						(2.6)						(3.3)		%
Average treatments per normalized day			91,889						91,378						511						0.6		%
Number of normalized treatment days(1)			76.5						79.5						(3.0)						(3.8)		%
Normalized non-acquired treatment growth(2)			0.1		%				(0.6)		%

Certain columns, rows or percentages may not sum due to the presentation of rounded numbers.

(1)Normalized treatment days reflect treatment days adjusted to normalize for the mix of days of the week in a given period.

(2)Normalized non-acquired treatment growth reflects year over year growth in treatment volume, adjusted to exclude acquisitions and other similar transactions, and further adjusted to normalize for the number and mix of treatment days in a given quarter versus the prior year quarter.

			Three months ended												YTD Q1 2026 vs. YTD Q1 2025
			March 31, 2026						March 31, 2025						Amount						Percent
Dialysis treatments			7,029,525						7,040,519						(10,994)						(0.2)		%
Average treatments per day			91,650						91,793						(143)						(0.2)		%
Treatment days			76.7						76.7						—						—		%
Average treatments per normalized day			91,889						91,554						335						0.4		%
Number of normalized treatment days(1)			76.5						76.9						(0.4)						(0.5)		%

Certain columns, rows or percentages may not sum due to the presentation of rounded numbers.

(1)Normalized treatment days reflect treatment days adjusted to normalize for the mix of days of the week in a given quarter.

Our U.S. dialysis operating revenues and expenses are directly driven by treatment volume. The decrease in our U.S. dialysis treatments for the first quarter of 2026 from the fourth quarter of 2025 was primarily driven by a decrease in treatment days, partially offset by increased patient count. The decrease in our U.S. dialysis treatments for the three months ended March 31, 2026 from the three months ended March 31, 2025 was primarily driven by a decline in average treatments per day due to mix of treatments days.

Revenues:

			Three months ended												Q1 2026 vs. Q4 2025
			March 31, 2026						December 31, 2025						Amount						Percent
			(dollars in millions, except per treatment data)
Total revenues			$	2,942					$	3,076					$	(134)					(4.4)		%
Average patient service revenue per treatment			$	417.59					$	422.60					$	(5.01)					(1.2)		%

Certain columns, rows or percentages may not sum due to the presentation of rounded numbers.

			Three months ended												YTD Q1 2026 vs. YTD Q1 2025
			March 31, 2026						March 31, 2025						Amount						Percent
			(dollars in millions, except per treatment data)
Total revenues			$	2,942					$	2,823					$	119					4.2		%
Average patient service revenue per treatment			$	417.59					$	400.14					$	17.45					4.4		%

Certain columns, rows or percentages may not sum due to the presentation of rounded numbers.

U.S. dialysis average patient service revenue per treatment for the first quarter of 2026 compared to the fourth quarter of 2025 decreased driven by a seasonal decline from co-insurance and deductibles and other normal fluctuations, partially offset by increases in average reimbursement rates, including Medicare base rate and other annual rate increases.

U.S. dialysis average patient service revenue per treatment for the three months ended March 31, 2026 increased compared to the three months ended March 31, 2025 primarily driven by an increase in average reimbursement rates from normal annual increases, including Medicare base rate, and other normal fluctuations.

Operating expenses and charges:

			Three months ended												Q1 2026 vs. Q4 2025
			March 31, 2026						December 31, 2025						Amount						Percent
			(dollars in millions, except per treatment data)
Patient care costs			$	1,969					$	2,031					$	(62)					(3.1)		%
General and administrative			320						336						(16)						(4.8)		%
Depreciation and amortization			155						163						(8)						(4.9)		%
Equity investment income			(8)						(10)						2						20.0		%
Total operating expenses and charges			$	2,436					$	2,521					$	(85)					(3.4)		%
Patient care costs per treatment			$	280.11					$	279.60					$	0.51					0.2		%

Certain columns, rows or percentages may not sum due to the presentation of rounded numbers.

			Three months ended												YTD Q1 2026 vs. YTD Q1 2025
			March 31, 2026						March 31, 2025						Amount						Percent
			(dollars in millions, except per treatment data)
Patient care costs			$	1,969					$	1,913					$	56					2.9		%
General and administrative			320						283						37						13.1		%
Depreciation and amortization			155						157						(2)						(1.3)		%
Equity investment income			(8)						(6)						(2)						(33.3)		%
Total operating expenses and charges			$	2,436					$	2,347					$	89					3.8		%
Patient care costs per treatment			$	280.11					$	271.77					$	8.34					3.1		%

Certain columns, rows or percentages may not sum due to the presentation of rounded numbers.

Patient care costs. U.S. dialysis patient care costs per treatment for the first quarter of 2026 increased from the fourth quarter of 2025 primarily due to increased compensation expense, including increased wage rates, as well as increased insurance costs. These increases were partially offset by decreases in health benefits expense and pharmaceutical costs.

U.S. dialysis patient care costs per treatment for the three months ended March 31, 2026 increased from the three months ended March 31, 2025 primarily due to increased compensation expenses, including increased wage rates, as well as increases in insurance costs and medical supplies expense.

General and administrative expenses. U.S. dialysis general and administrative expenses in the first quarter of 2026 decreased from the fourth quarter of 2025 primarily due to decreased professional fees and health benefits expense, partially offset by increased compensation expenses.

U.S. dialysis general and administrative expenses for the three months ended March 31, 2026 increased from the three months ended March 31, 2025 due to increases in IT-related costs and compensation expenses, including increased wage rates.

Depreciation and amortization. Depreciation and amortization expense is directly impacted by the number of our dialysis centers and the information technology that we develop and acquire. U.S. dialysis depreciation and amortization expenses in the first quarter of 2026 decreased compared to the fourth quarter of 2025 primarily due to higher depreciation expense in the fourth quarter for certain leasehold improvements.

U.S. dialysis depreciation and amortization expenses for the three months ended March 31, 2026 compared to the three months ended March 31, 2025 decreased primarily due to fully depreciated assets.

Equity investment income. U.S. dialysis equity investment income for the first quarter of 2026 decreased compared to the fourth quarter of 2025 due to decreased profitability at certain nonconsolidated dialysis partnerships. Equity investment income for the three months ended March 31, 2026 increased compared to the three months ended March 31, 2025 due to increased profitability at certain nonconsolidated dialysis partnerships.

Operating income:

			Three months ended												Q1 2026 vs. Q4 2025
			March 31, 2026						December 31, 2025						Amount						Percent
			(dollars in millions)
Operating income			$	506					$	556					$	(50)					(9.0)		%

			Three months ended												YTD Q1 2026 vs. YTD Q1 2025
			March 31, 2026						March 31, 2025						Amount						Percent
			(dollars in millions)
Operating income			$	506					$	476					$	30					6.3		%

U.S. dialysis operating income for the first quarter of 2026 decreased compared to the fourth quarter of 2025 as a result of all factors discussed above.

U.S. dialysis operating income for the three months ended March 31, 2026 increased compared to the three months ended March 31, 2025 as a result of all factors discussed above.

Other—Ancillary services

Our other operations include ancillary services that are primarily aligned with our core business of providing dialysis services to our network of patients. As of March 31, 2026, these consisted principally of our U.S. IKC business, certain U.S. other ancillary businesses (including our clinical research programs, transplant software business, and venture investment group), and our international operations.

As of March 31, 2026, DaVita IKC provided integrated care and disease management services to approximately 62,600 patients in risk-based integrated care arrangements and to an additional 6,300 patients in other integrated care arrangements. We also expect to add additional service offerings to our business and pursue additional strategic initiatives in the future as circumstances warrant, which could include, among other things, healthcare services not related to kidney disease.

For a discussion of the risks related to IKC and our ancillary services, see the discussion in the risk factors in Part I Item 1A. "Risk Factors" of our 2025 10-K under the headings, "We invest in strategic and operational initiatives to maintain our business and expand our capabilities in a complex, evolving and highly regulated environment..." and "If we are not able to successfully implement our strategy with respect to our integrated kidney care and value-based care initiatives..."

As of March 31, 2026, our international dialysis business owned or operated 596 outpatient dialysis centers located in 14 countries outside of the United States.

Ancillary services results of operations

			Three months ended												Q1 2026 vs. Q4 2025
			March 31, 2026						December 31, 2025						Amount						Percent
			(dollars in millions)
Revenues:
U.S. IKC			$	116					$	190					$	(74)					(38.9)		%
U.S. other ancillary			10						10						—						—		%
International			372						367						5						1.4		%
Total ancillary services revenues			$	498					$	567					$	(69)					(12.2)		%
Operating income (loss):
U.S. IKC			$	(19)					$	46					$	(65)					(141.3)		%
U.S. other ancillary			(6)						(4)						(2)						(50.0)		%
International			30						(4)						34						850.0		%
Total ancillary services operating income			$	6					$	37					$	(31)					(83.8)		%
Adjusted operating (loss) income(1):
U.S. IKC			$	(19)					$	46					$	(65)					(141.3)		%
U.S. other ancillary			(6)						(4)						(2)						(50.0)		%
International			30						21						9						42.9		%
Total ancillary services adjusted operating income			$	6					$	62					$	(56)					(90.3)		%

Certain columns, rows or percentages may not sum due to the presentation of rounded numbers.

(1)For a reconciliation of adjusted operating income by reportable segment, see the “Reconciliations of Non-GAAP measures” section below.

			Three months ended												YTD Q1 2026 vs. YTD Q1 2025
			March 31, 2026						March 31, 2025						Amount						Percent
			(dollars in millions)
Revenues:
U.S. IKC			$	116					$	105					$	11					10.5		%
U.S. other ancillary			10						7						3						42.9		%
International			372						302						70						23.2		%
Total ancillary services revenues			$	498					$	415					$	83					20.0		%
Operating income (loss):
U.S. IKC			$	(19)					$	(29)					$	10					34.5		%
U.S. other ancillary			(6)						(4)						(2)						(50.0)		%
International			30						30						—						—		%
Total ancillary services operating income (loss):			$	6					$	(3)					$	9					300.0		%

Certain columns, rows or percentages may not sum due to the presentation of rounded numbers.

Items impacting operating income

Accruals for legal matters. During the fourth quarter of 2025, we recorded a charge of $25 million for a legal matter within our international line of business.

Operating income (loss): and adjusted operating income (loss):

IKC operating loss for the first quarter of 2026 compared to operating income for the fourth quarter of 2025 was primarily driven by a net decrease in shared savings. IKC operating loss for the three months ended March 31, 2026 compared to the three months ended March 31, 2025 decreased, primarily due to a net increase in shared savings.

U.S. other ancillary services operating loss for the first quarter of 2026 remained relatively flat compared to the fourth quarter of 2025. U.S. other ancillary services operating loss for the three months ended March 31, 2026 compared to the three months ended March 31, 2025 was impacted by a reduction of the earn-out obligations related to our transplant software business in the first quarter of 2025.

International operating results for the first quarter of 2026 compared to the fourth quarter of 2025 were impacted by a legal accrual in 2025, as described above. International operating results and adjusted operating results were impacted by charges in the fourth quarter of 2025 for balances deemed uncollectible and average reimbursement rate increases in the first quarter of 2026 in certain countries. International operating income for the three months ended March 31, 2026 was relatively flat compared to the three months ended March 31, 2025, primarily due to acquired treatment growth, offset by increased compensation expenses.

Corporate administrative support

			Three months ended												Q1 2026 vs. Q4 2025
			March 31, 2026						December 31, 2025						Amount						Percent
			(dollars in millions)
Corporate administrative support			$	(30)					$	(32)					$	2					6.3		%

			Three months ended												YTD Q1 2026 vs. YTD Q1 2025
			March 31, 2026						March 31, 2025						Amount						Percent
			(dollars in millions)
Corporate administrative support			$	(30)					$	(34)					$	4					11.8		%

Corporate administrative support expenses for the first quarter of 2026 compared to the fourth quarter of 2025 decreased primarily due to decreased long-term incentive compensation, partially offset by increased professional fees. Corporate administrative support expenses for the three months ended March 31, 2026 compared to the three months ended March 31, 2025 decreased primarily due to decreased professional fees.

Corporate-level charges

			Three months ended												Q1 2026 vs. Q4 2025
			March 31, 2026						December 31, 2025						Amount						Percent
			(dollars in millions)
Debt expense			$	145					$	148					$	(3)					(2.0)		%
Debt extinguishment and modification costs			$	—					$	9					$	(9)					(100.0)		%
Weighted average effective interest rate(1)			5.44		%				5.51		%										(0.07)		%
Other income (loss), net			$	4					$	(21)					$	25					119.0		%
Effective income tax rate from continuing operations			19.4		%				20.0		%										(0.6)		%
Effective income tax rate from continuing operations attributable to DaVita Inc.(2)			25.1		%				27.7		%										(2.6)		%
Net income attributable to noncontrolling interests			$	78					$	97					$	(19)					(19.6)		%

(1)Represents our overall weighted average effective interest rate on all debt, including the effect of interest rate caps and amortization of debt discount, premium and deferred financing charges as of the dates presented.

(2)For a reconciliation of our effective income tax rate from continuing operations attributable to DaVita Inc., see the "Reconciliations of Non-GAAP measures" section below.

			Three months ended												YTD Q1 2026 vs. YTD Q1 2025
			March 31, 2026						March 31, 2025						Amount						Percent
			(dollars in millions)
Debt expense			$	145					$	135					$	10					7.4		%
Weighted average effective interest rate(1)			5.44		%				5.65		%										(0.21)		%
Other income (loss), net			$	4					$	(18)					$	22					122.2		%
Effective income tax rate from continuing operations			19.4		%				18.9		%										0.5		%
Effective income tax rate from continuing operations attributable to DaVita Inc.(2)			25.1		%				24.9		%										0.2		%
Net income attributable to noncontrolling interests			$	78					$	69					$	9					13.0		%

(1)Represents our overall weighted average effective interest rate on all debt, including the effect of interest rate caps and amortization of debt discount, premium and deferred financing charges as of the dates presented.

(2)For a reconciliation of our effective income tax rate from continuing operations attributable to DaVita Inc., see the "Reconciliations of Non-GAAP measures" section below.

Debt expense

Debt expense for the first quarter of 2026 compared to the fourth quarter of 2025 decreased due to decreased weighted average effective interest rates, partially offset by increased borrowing activity on our revolving line of credit. Debt expense for the three months ended March 31, 2026 compared to the three months ended March 31, 2025 increased primarily due to an increase in our long-term debt balance related to the issuance of the 6.75% senior notes due 2033 in the second quarter of 2025, partially offset by decreased weighted average effective interest rates.

Debt extinguishment and modification costs

The three months ended December 31, 2025 included debt extinguishment and modification costs of $9 million composed partially of fees incurred in connection with the Term Loan A-2 refinancing transaction and partially of deferred financing costs written off for the extinguishment of Term Loan A-1 and prior revolving credit facility.

Other income (loss), net

Other income for the first quarter of 2026 compared to loss for the fourth quarter of 2025 was impacted by equity investment losses in the fourth quarter of 2025 at Mozarc Medical Holding LLC (Mozarc) which included impairment and restructuring charges. Other income for the three months ended March 31, 2026 compared to other loss for the three months ended March 31, 2025 was impacted by equity investment losses at Mozarc recognized in the first quarter of 2025 and decreased net losses on other investments.

Provision for income taxes

The effective income tax rate from continuing operations and the effective income tax rate from continuing operations attributable to DaVita Inc. decreased for the first quarter of 2026 compared to the fourth quarter of 2025 primarily due to a reduction in the impact of valuation allowances and nondeductible executive comp, partially offset by larger discrete benefits recognized in the fourth quarter of 2025 primarily related to the release of reserves that expired under the statute of limitations. Additionally, our effective income tax rate from continuing operations was also impacted by the portion of earnings attributable to our non-controlling interests.

The effective income tax rate from continuing operations and the effective income tax rate from continuing operations attributable to DaVita Inc. for the three months ended March 31, 2026 increased compared to the three months ended March 31, 2025 primarily due to a reduction in discrete benefits recognized in the quarter as a percentage of earnings. Discrete items include benefits recognized in each period for stock-based compensation partially offset by an uncertain tax position recognized in the first quarter of 2026.

Net income attributable to noncontrolling interests

The decrease in net income attributable to noncontrolling interests for the first quarter of 2026 from the fourth quarter of 2025 was due to decreased profitability at certain U.S. dialysis partnerships. The increase in net income attributable to noncontrolling interests for the three months ended March 31, 2026 from the three months ended March 31, 2025 was due to increased profitability at certain U.S. dialysis partnerships.

U.S. dialysis accounts receivable

Our U.S. dialysis accounts receivable balances at March 31, 2026 and December 31, 2025 were $1.695 billion and $1.610 billion, respectively, representing approximately 52 days and 49 days of revenue outstanding (DSO), respectively. The increase in DSO is primarily due to timing of collections. Our DSO calculation is based on the current quarter’s average revenues per day. There were no significant changes from the fourth quarter of 2025 to the first quarter of 2026 in the carrying value of accounts receivable outstanding over one year old.

Liquidity and capital resources

The following table summarizes our major sources and uses of cash, cash equivalents and restricted cash:

			Three months ended March 31,												YTD Q1 2026 vs. YTD Q1 2025
			2026						2025						Amount						Percent
			(dollars in millions and shares in thousands)
Net cash provided by operating activities:
Net income			$	275					$	232					$	43					18.5		%
Non-cash items in net income			267						238						29						12.2		%
Other working capital changes			(214)						(293)						79						27.0		%
Other			(8)						3						(11)						(366.7)		%
			$	321					$	180					$	141					78.3		%
Net cash used in investing activities:
Maintenance capital expenditures(1)			$	(74)					$	(95)					$	21					22.1		%
Development capital expenditures(2)			(28)						(48)						20						41.7		%
Acquisition expenditures			(34)						(10)						(24)						(240.0)		%
Proceeds from sale of self-developed properties			2						9						(7)						(77.8)		%
Other			(5)						(18)						13						72.2		%
			$	(139)					$	(162)					$	23					14.2		%
Net cash used in financing activities:
Debt issuances, net			$	346					$	287					$	59					20.6		%
Deferred and debt-related financing costs			(3)						(6)						3						50.0		%
Distributions to noncontrolling interests			(85)						(93)						8						8.6		%
Contributions from noncontrolling interests			4						2						2						100.0		%
Stock award exercises and other share issuances			(61)						(25)						(36)						(144.0)		%
Share repurchases			(396)						(542)						146						26.9		%
Other			(18)						(5)						(13)						(260.0)		%
			$	(213)					$	(383)					$	170					44.4		%
Total number of shares repurchased			3,005						3,660						(655)						(17.9)		%
Free cash flow(3)			$	140					$	(45)					$	185					411.1		%

Certain columns or rows may not sum due to the presentation of rounded numbers.

(1)Maintenance capital expenditures represent capital expenditures to maintain the productive capacity of the business and include those made for investments in information technology, dialysis center renovations, capital asset replacements, and any other capital expenditures that are not development or acquisition expenditures.

(2)Development capital expenditures principally represent capital expenditures (other than acquisition expenditures) made to expand the productive capacity of the business and include those for new U.S. and international dialysis center developments, dialysis center expansions and relocations, and new or expanded contracted hospital operations.

(3)For a reconciliation of our free cash flow, see the "Reconciliations of Non-GAAP measures" section below.

Consolidated cash flows

Consolidated cash flows from operating activities during the three months ended March 31, 2026 increased compared to the three months ended March 31, 2025. The increase was principally due to changes in working capital as well as an increase in operating results.

Free cash flow during the three months ended March 31, 2026 increased as compared to the three months ended March 31, 2025 primarily due to an increase in net cash provided by operating activities, as described above, and decreases in capital expenditures.

Significant sources of cash during the period included net draws on our revolving line of credit of $375 million. Significant uses of cash included regularly scheduled principal payments under our senior secured credit facilities totaling approximately $13 million on our Term Loan A-2 and $5 million on Term Loan B-2, as well as additional required payments under other debt arrangements. In addition, during the three months ended March 31, 2026 we used cash to repurchase 3.0 million shares of our common stock.

By comparison, the same period in 2025 included net draws on our revolving line of credit of $425 million. Significant uses of cash during the three months ended March 31, 2025 included the repayment of $93 million in interest-free funding made available by UnitedHealth Group and its affiliates following the cybersecurity breach that affected Change Healthcare during the first quarter of 2024, regularly scheduled principal payments under our senior secured credit facilities totaling approximately $30 million on our Term Loan A-1 and $4 million on Term Loan B-1, and additional required payments under other debt arrangements. In addition, during the three months ended March 31, 2025 we used cash to repurchase 3.7 million shares of our common stock.

Dialysis center footprint

The table below shows the footprint of our dialysis operations by number of dialysis centers owned or operated:

			U.S.												International
			Three months ended March 31,												Three months ended March 31,
			2026						2025						2026						2025
Number of centers operated at beginning of period			2,657						2,657						585						509
Acquired centers			7						1						9						1
Developed centers			2						6						1						—
Net change in non-owned managed or administered centers(1)			—						1						2						4
Sold and closed centers(2)			—						(3)						(1)						(2)
Closed centers(3)			—						(1)						—						—
Number of centers operated at end of period			2,666						2,661						596						512

(1)Represents the change in the number of dialysis centers which we manage or provide administrative services to but in which we own a noncontrolling equity interest or which are wholly-owned by third parties.

(2)Represents dialysis centers that were sold and/or closed for which the majority of patients were not retained.

(3)Represents dialysis centers that were closed for which the majority of patients were retained and transferred to one of our other existing outpatient dialysis centers.

Available liquidity

As of March 31, 2026, we had $1.125 billion available and $375 million drawn on our $1.5 billion revolving line of credit under our senior secured credit facilities. Credit available under this revolving line of credit is reduced by the amount of any letters of credit outstanding thereunder, of which there were none as of March 31, 2026. We separately had approximately $207 million in letters of credit outstanding under a separate bilateral secured letter of credit facility.

See Note 6 to the condensed consolidated financial statements for components of our long-term debt and their interest rates.

We believe that our cash flow from operations and other sources of liquidity, including from amounts available under our senior secured credit facilities and our access to the capital markets, will be sufficient to fund our scheduled debt service under the terms of our debt agreements and other obligations for the foreseeable future, including the next 12 months. From time to time, depending on market conditions, our capital requirements and the availability of financing, among other things, we may seek to refinance our existing debt and may incur additional indebtedness. Our primary recurrent sources of liquidity are cash from operations and cash from borrowings, which are subject to general, economic, financial, competitive, regulatory and other factors that are beyond our control, as described in Part I Item 1A. "Risk Factors" of our 2025 10-K*.*

Reconciliations of Non-GAAP measures

The following tables provide reconciliations of adjusted operating income (loss) to operating income (loss) as presented on a U.S. generally accepted accounting principles (GAAP) basis for our U.S. dialysis reportable segment as well as for our U.S. IKC business, our U.S. other ancillary services, our international business, and for our total ancillary services which combines them and is disclosed as our other segments category, in addition to our corporate administrative support.

These non-GAAP or "adjusted" measures are presented because management believes these measures are useful adjuncts to, but not alternatives for, our GAAP results. Specifically, management uses adjusted operating income (loss) to compare and evaluate our performance period over period and relative to competitors, to analyze the underlying trends in our business, to establish operational budgets and forecasts and for incentive compensation purposes. We believe this non-GAAP measure is also useful to investors and analysts in evaluating our performance over time and relative to competitors, as well as in analyzing the underlying trends in our business. We also believe this presentation enhances a user's understanding of our normal operating income by excluding certain items which we do not believe are indicative of our ordinary results of operations.

In addition, our effective income tax rate on income from continuing operations attributable to DaVita Inc. excludes noncontrolling owners' income, which primarily relates to non-tax paying entities. We believe this adjusted effective income tax rate from continuing operations is useful to management, investors and analysts in evaluating our performance and establishing expectations for income taxes incurred on our ordinary results attributable to DaVita Inc.

Finally, our free cash flow represents net cash provided by operating activities less distributions to noncontrolling interests, development capital expenditures, and maintenance capital expenditures; plus contributions from noncontrolling interests and proceeds from the sale of self-developed properties. Management uses this measure to assess our ability to fund acquisitions and meet our debt service obligations and we believe this measure is equally useful to investors and analysts as an adjunct to cash flows from operating activities and other measures under GAAP.

It is important to bear in mind that these non-GAAP "adjusted" measures are not measures of financial performance under GAAP and should not be considered in isolation from, nor as substitutes for, their most comparable GAAP measures.

			Three months ended March 31, 2026
			U.S. dialysis						Ancillary services																								Corporate administration						Consolidated
						U.S. IKC						U.S. Other						International						Total
			(dollars in millions)
Operating income (loss)			$	506					$	(19)					$	(6)					$	30					$	6					$	(30)					$	482
Adjusted operating income (loss)			$	506					$	(19)					$	(6)					$	30					$	6					$	(30)					$	482

			Three months ended December 31, 2025
			U.S. dialysis						Ancillary services																								Corporate administration						Consolidated
						U.S. IKC						U.S. Other						International						Total
			(dollars in millions)
Operating income (loss)			$	556					$	46					$	(4)					$	(4)					$	37					$	(32)					$	561
Legal contingency accrual(1)			—						—						—						25						25						—						25
Adjusted operating income (loss)			$	556					$	46					$	(4)					$	21					$	62					$	(32)					$	586

			Three months ended March 31, 2025
			U.S. dialysis						Ancillary services																								Corporate administration						Consolidated
						U.S. IKC						U.S. Other						International						Total
			(dollars in millions)
Operating income (loss)			$	476					$	(29)					$	(4)					$	30					$	(3)					$	(34)					$	439
Adjusted operating income (loss)			$	476					$	(29)					$	(4)					$	30					$	(3)					$	(34)					$	439

Certain columns or rows in the above tables may not sum due to the presentation of rounded numbers.

(1)Represents an accrual for potential third-party judgment costs for certain legal matters. We have excluded this charge from our non-GAAP metrics because, among other things, we do not believe it is indicative of our ordinary results of operations because the charge is significant and may obscure analysis of underlying trends and financial performance of our current business.

			Three months ended
			March 31, 2026						December 31, 2025												March 31, 2025
			(dollars in millions)
Income from continuing operations before income taxes			$	341					$	383											$	286
Less: Noncontrolling owners' income primarily attributable to non-tax paying entities			(78)						(93)												(69)
Income from continuing operations before income taxes attributable to DaVita Inc.			$	264					$	290											$	217
Income tax expense for continuing operations			$	66					$	77											$	54
Less: Income tax attributable to noncontrolling interests			—						4												—
Income tax expense from continuing operations attributable to DaVita Inc.			$	66					$	80											$	54
Effective income tax rate on income from continuing operations attributable to DaVita Inc.			25.1		%				27.7		%										24.9		%

Certain columns or rows may not sum or recalculate due to the presentation of rounded numbers.

			Three months ended
			March 31, 2026						March 31, 2025
			(dollars in millions)
Net cash provided by operating activities			$	321					$	180
Adjustments to reconcile net cash provided by operating activities to free cash flow:
Distributions to noncontrolling interests			(85)						(93)
Contributions from noncontrolling interests			4						2
Maintenance capital expenditures			(74)						(95)
Development capital expenditures			(28)						(48)
Proceeds from sale of self-developed properties			2						9
Free cash flow			$	140					$	(45)

Certain columns or rows may not sum due to the presentation of rounded numbers.

Off-balance sheet arrangements and aggregate contractual obligations

In addition to the debt obligations and operating lease liabilities reflected on our balance sheet, we have certain potential commitments associated with letters of credit, working capital funding or other financing, if necessary, to certain nonconsolidated businesses that we manage and in which we own a noncontrolling equity interest or which are wholly-owned by third parties. We also have agreed to future investments in particular equity method and other investments if certain milestones are achieved or capital calls are made, as applicable. Additionally, see Note 7 to the condensed consolidated financial statements for discussion on commitments related to our agreement to acquire a noncontrolling minority interest in Elara Caring. For additional information, see Note 16 to the consolidated financial statements included in our 2025 10-K.

We also have potential obligations to purchase the noncontrolling interests held by third parties in many of our majority-owned dialysis partnerships and other nonconsolidated entities. These obligations are in the form of put provisions that are exercisable at the third-party owners’ discretion within specified periods as outlined in each specific put provision. For additional information on these obligations and how we measure and report them, see Note 11 to the condensed consolidated financial statements included in this report and Notes 16 and 23 to the consolidated financial statements included in our 2025 10-K.

For information on the maturities and other terms of our long-term debt, see Note 6 to the condensed consolidated financial statements.

As of March 31, 2026, we have outstanding letters of credit in the aggregate amount of approximately $207 million under a bilateral secured letter of credit facility separate from our senior secured credit facilities.

As of March 31, 2026, we have outstanding purchase agreements with various suppliers to purchase set amounts of dialysis equipment, parts, pharmaceuticals, supplies and technology services. If we fail to meet the minimum purchase commitments under these contracts during any year, we are required to pay the difference to the supplier, as described further in Note 16 to the Company's consolidated financial statements included in our 2025 10-K.

New Accounting Standards

See discussion of new accounting standards in Note 13 to the condensed consolidated financial statements.